Memorandum by Virgin Media
INTRODUCTION
What's Virgin Media's interest and agenda?
Virgin Media welcomes the Communications Committee's
timely inquiry into this critical issue.
While the company does not itself produce news,
it has a strong interest in ensuring the quality and diversity
of news. As a media company with a television broadcast business,
Virgin Media's views mainly relate to the provision of television
news although there are clearly issues which arise from the cross-media
concentration of News Corp/BSkyB.
Firstly, we are committed to offering our 3.3
million TV customers the most comprehensive TV service in the
UK. A range of high quality, independent news and current affairs
programming is an integral component of such a service.
Secondly, questions of media diversity in general—and
plurality of news provision in particular—have been thrown
into sharp relief by Sky's acquisition in November 2006 of a 17.9%
stake in ITV. As a competitor and customer of both organizations,
Virgin Media has been involved in the current regulatory inquiry
into this acquisition. While the implications of BSkyB's stake
are currently being reviewed by the Competition Commission on
both public interest and competition grounds, we believe the Communications
Committee has a potentially useful role in considering the impact
which the position of News Corp/BSkyB in the marketplace has on
plurality in broadcasting, especially news broadcasting in the
UK.
Thirdly, Virgin Media has a strong commercial
and philosophical commitment to the development of a competitive
and dynamic pay TV market that operates in the consumers' interest.
The availability and diversity of news is, in its own right, an
important aspect of this. Just as significant however is the relationship
between control of content and the ownership of distribution platforms
in the future development of the market. As its enquiry develops,
we therefore hope the Committee will take the opportunity to examine
news ownership (and TV news in particular) in the context of the
broader dynamics of the market.
Finally, Virgin Media is a high profile, publicly
owned organization that frequently finds itself in the media spotlight.
It has a strong commercial interest in ensuring that developments
affecting the company are reported accurately, objectively and
without fear or favour. As a media business, moreover, the organizations
responsible for reporting on the company are also often also our
competitors. In such circumstances, objectivity, editorial independence,
journalistic integrity and the freedom to report is important
to us.
How and why have the agendas of news providers
changed? How has the content of news programmes and newspapers
altered over the years?
Virgin Media is not itself a producer of news
programmes and is not, therefore, well placed to comment in detail
on changes in news agendas and content.
How is the way that people access the news changing?
Although there has been an increase in the number
of ways in which individuals can access news, it is apparent that
the majority of the population continue to rely on traditional
methods.
Television remains by far the most important
source of news and current affairs information for the UK population
as a whole. 72% of that population indicates that television is
their primary source of news coverage.[1]
In contrast, 10% rely upon newspapers to obtain their news, and
a further 9% rely upon radio. 94% of the UK population have expressed
the view that it is important for television news to be impartial,
whilst 86% placed importance on the need for newspapers to be
impartial.
Moreover, television news is the most trusted
news medium, with 67% indicating that TV is the most trusted to
deliver fair and unbiased news, with radio and newspapers following
with 13 and 7% respectively.
Furthermore, it is apparent that these important
news services are concentrated in the hands of a small number
of organisations. For example, as set out in table 1, below, the
primary news providers to television channels which UK viewers
use as their principal source of television news are the BBC,
ITN and BSkyB. Similarly, News Corp, through News International,
is the largest publisher of newspapers in the UK, with a 34.4%
share of circulation of all daily and Sunday titles in the UK,
37.2% of quality, and 52.3% of popular, daily and Sunday newspaper
titles.[2]
Table 1
UK NEWS PROVISION BY TELEVISION CHANNEL
|
| Channel | News provider
| Share of UK news audience[3]
|
|
| BBC | BBC |
64% |
| ITV1 | ITN
| 22% |
| Sky News | BSkyB
| 5% |
| Channel 4 | ITN
| 5% |
| Five | BSkyB
| 3% |
|
It is apparent that in recent years there has been a proliferation
in the number of different sources and platforms over which individuals
can access news (internet, blogs, mobile news). However, it is
also apparent that this has not materially increased the level
of plurality in the UK. For example, although there has been an
increase in the number of specialist news channels on multi-channel
platforms, these channels do not attract a significant audience.
Indeed, rather than undermining the importance (from the
perspective of plurality and diversity of views) of conventional
news sources, the profusion of information on the internet in
the form of news sites and blogs has actually reinforced the status
and importance of "conventional" news sources. This
is because there is a lack of trust in the accuracy and credibility
of the "new" sources of news relative to established
news brands. This is reflected by the fact that the most popular
internet news sites belong to the established television news
providers (BBC, ITV, Sky News) and newspaper publishers (eg News
International, Guardian Media Group).
How has the process of news gathering changed?
As set out above, Virgin Media is not a news producer, so,
save as set out below in relation to news gathering and the news
agenda, is not well placed to comment on this issue.
What is the impact of the concentration of ownership on the
balance and diversity of opinion seen in the news? Does ownership
have an impact on editorial priorities and on news values such
as fairness, accuracy and impartiality?
Virgin Media considers that diversity and plurality of opinion
can only be safeguarded through diversity of ownership. The concept
of plurality is a fragile one, and embodies the principle of an
independent view free from the possibility of influence by a common
denominator. As such, there is always the possibility of changes
of ownership influencing editorial priorities and news values.
Accordingly, Virgin Media considers that concentration of
news media ownership inevitably has an adverse impact on the balance
and diversity of opinion. As highlighted above, even though the
number of ways in which news is accessed has increased, this has
also reinforced the voice of traditional news sources. The danger
in concentration in media ownership is that one or more voices
become so loud that they drown out the other, smaller voices.
That independence of editorial integrity is capable of being
influenced by ownership was well demonstrated by Lord Puttnam
in the debate on the amendment to the Communications Bill:
"The noble Lord [Harris] might also like to circle
the world and find out why 274 out of 275 editors of Newscorp
newspapers came to exactly the same conclusion as their proprietor
on the war in Iraq. Interestingly, the only one that did not was
I believe in Borneo, where that opinion would have resulted in
a catastrophic drop in circulation in a Muslim country. Presumably
that editor was given leave to desist."[4]
There are a number of ways in which a media owner might influence
the editorial priorities, fairness, transparency and impartiality
of the news:
— direct instructions or involvement of the
media owner in setting the editorial approach or policy of the
news media;
— the owner influencing the way in which the
news is gathered and presented—in terms of resources available
and stories which are considered worthy of investment (eg whether
to station correspondents in Iraq or to rely on agency coverage).
This determines what is considered to be news; and
— the owner's political or business interests
directly or indirectly impacting the choice of stories pursued
by their editors and the way in which those stories are presented.
In respect of this last point, Virgin Media considers that
it is important that it is recognised that the ability of a media
owner to influence editorial priorities, fairness, accuracy and
impartiality does not only involve exercising day to day editorial
control over the content of news output. It may be tacit, with
editors having regard to their own perceptions as to how their
employer's owners may react to particular news strategies and
editorial approaches. Whilst the degree of such influence varies
according to the individuals concerned in the ownership of media
enterprises, it is clear that this takes place across a range
of news sources.
By way of example of the impact of ownership on the media
agenda, a number of national newspapers (the Independent,
the Guardian, Daily Mail, Mirror and Daily Telegraph)
carried a story on 19 July 2007 concerning Mr Rupert Murdoch's
contacts with Mr Blair in the run-up to the Iraq war. The story
was not featured at all in either the Sun or The Times;
it simply did not form part of these newspapers' news agendas
for that day. It is difficult for Virgin Media to tell whether
this was as a result of explicit or tacit pressure not to report
the story, or because the editors realised that reporting such
a story would not please Mr Murdoch and decided not to do so.
Accordingly, it is clearly in the public interest that there
is a plurality of persons with control of news providers in the
UK, as only in this way can a plurality of opinions be ensured.
Virgin Media considers that, for a healthy news environment to
exist, this plurality of ownership should be present in each news
genre, news media and geographic area. As set out above, plurality
is a binary concept—once sufficient influence has been acquired
to raise the possibility that editorial decisions or policy will
be altered as a result, plurality has been lost, it is not a matter
of degree or of assessment of the magnitude and likelihood of
possible effects.
For example, News Corporation/BSkyB recently added to its
extensive media interests by becoming the largest shareholder
in ITV. This acquisition will have a significant impact on media
plurality by:
(a) reducing the plurality of the channels through which
UK television news is provided, leaving only the BBC, Channel
4 and Five as meaningful alternative news providers;
(b) reducing the number of independent providers of television
news from three to two;
(c) reducing the number of providers of cross-media news
to UK audiences. The share of UK cross media news audience which
relies on News Corp's enterprises for their news is increased
by some 11 million people, from 20.2 million to 31.2 million,
amounting to some 65% of the UK adult population; and
(d) leading to a greater reduction in the provision of
cross media news in relation to particular audiences served by
BSkyB/News Corp and ITV, for example to particular demographic
groups.
Virgin Media considers that it is clear that this acquisition
of a stake in ITV by BSkyB may be expected to operate against
the public interest by providing News Corp/BSkyB with an increased
and unparalleled ability to influence the agenda which is not
counter-balanced by sufficient alternative media interests.
While Virgin Media considers that editorial influence arises
irrespective of the ownership of BSkyB/News Corp, it is exacerbated
by the evidence showing that News Corp and Mr Rupert Murdoch have
a history of controlling or influencing the agenda of businesses
under their control or influence and of seeking to use that influence
to set the news agenda, and indeed to influence government policy.
The issue which arises from one owner influencing so much
of the media voice is that their opinions become excessively influential.
As "The Westminster Hour, Honest Politics" on BBC Radio
commented:
"But no government can afford to ignore someone like
Rupert Murdoch who has daily access to so many millions of newspaper
readers and TV viewers, and is not afraid to use his media empire
to propagate his personal views. It may not be true that he has
a veto on Britain's European policies. But there is no doubt that
this American once Australian citizen effectively has more votes
than any British citizen when it comes to choices like joining
the Euro."[5]
In the context of the Competition Commission inquiry into
BSkyB's acquisition of a shareholding in ITV, Virgin Media has
gathered together a large volume of press and political commentary
on the way in which News Corp and Mr Rupert Murdoch have:
— gathered control over a large number of news
media businesses around the world,
— exercised direct influence over the editorial
policies of the news media businesses they control, and
— used those businesses to influence the public
and set the political agenda to an unprecedented extent.
If the Committee wishes to explore this evidence, Virgin
Media would be happy to provide it.
In summary, Virgin Media considers that the greater concentration
in news media ownership, the less plurality of voices and opinions
there will be and, in particular, if one media entity is allowed
to gather too much of the news media, the risk is that other voices
are drowned out. The Committee should, at an appropriate stage,
consider carefully the current plurality of media ownership in
the UK and whether this is sufficient to protect the balance and
diversity of opinion.
How should the public interest be protected and defined in
terms of news provision? Are the public interest provisions set
down for Ofcom in the Communications Act 2003 enough to ensure
a plurality of debating voices in the UK news media?
The Communications Act 2003 has set out a regulatory framework
which is based on two tenets:
— the "20/20" rule set out in Schedule
14, which sets an absolute statutory bar on certain levels of
media and cross-media ownership; and
— the media public interest provisions, which
provides the Secretary of State with the ability to consider acquisitions
of control which fall outside the scope of the 20/20 prohibition
but which may, nevertheless operate against the public interest
by adversely affecting plurality.
This latter amendment to the Communications Bill, introduced
by Lord Puttnam was, in Virgin Media's view, an extremely important,
and much needed, additional protection against concentration in
media ownership. As set out above, plurality is a binary concept,
it either exists or it does not. The acquisition of a significant
shareholding in ITV by BSkyB has served to highlight precisely
the need for the additional protections afforded by the public
interest test. In particular, the large number of views which
have been expressed to the Competition Commission and its recent
acknowledgement that the transaction is so complex that it will
require an additional 8 weeks in which to reach its verdict serve
to demonstrate that the availability of a process for reviewing
situations falling outside the 20/20 rule is vital.
As at the date of preparation of this submission, it is perhaps
premature to judge the efficacy of the public interest provisions
set out in the Communications Act 2003 in safeguarding the plurality
of voices in the UK news media. The current legislative framework
is currently being tested for the first time in the context of
the acquisition by BSkyB of its stake in ITV, and the Competition
Commission's provisional findings raise some concerns. Certainly
it is to be welcomed that the Secretary of State referred the
matter to the Competition Commission and this inquiry represents
an opportunity for the Competition Commission to address in detail
the effect of the acquisition on plurality. However, it appears
from the Competition Commission's provisional findings that it
has reached a different interpretation of the media public interest
rules (in particular, sections 58A(4) and (5) of the Enterprise
Act 2003) from that reached by Ofcom earlier this year in the
same case. The fact that these two regulators have reached different
views on the interpretation of these provisions implies one or
other has made an error and the Committee should explore this
carefully. The possibility that one of either the specialist media
regulator or the second phase regulator has misinterpreted the
test to be applied in media public interest cases does not bode
well for the consistent application (or understanding) of these
rules going forward. This is, therefore, an issue Virgin Media
would urge the Committee to consider.
It is very likely that the first outputs from the Competition
Commission inquiry will emerge just as the Communications Committee
begins its own inquiry, and there can be little doubt that those
conclusions will be of interest to the Committee's work programme
in this inquiry (and indeed to all others interested in the question
of media plurality).
4 October 2007
1
Ofcom research 2005. Back
2
Mediatel/ABC National Newspapers, May 2007. Back
3
BARB, May 2006-April 2007: The share of the UK audience for television
news by the primary channel/news provider used to view broadcast
news programs. Back
4
Hansard, 5 June 2003, Col 1450. Back
5
See "The Westminster Hour: Honest Politics",
transcript of Part 2, at www.bbc.co.uk Back
| 
